current market

Everything is getting multiple offers, right? Many sellers feel that way, but it’s just not true. Today let’s dive deeply into what is actually happening with multiple offers. I’m excited about this and I hope you like it too.

Non-locals: If you’re not local, would understanding more about multiple offers help you? Could you ask your MLS about including a “multiple offers” field? This is how I’ve been able to extract data like this for my market.

FIVE THINGS ABOUT MULTIPLE OFFERS

1) A rhythm of multiple offers: There is a rhythm to seeing multiple offers in the Sacramento region. There are more multiple offers in the spring and less as summer and fall unfold. This isn’t a huge surprise, but it’s cool to see on paper. If you wanted to know, 42% of sales last month had more than one offer (which is what I mean by “multiple offers”).

2) The market isn’t always hot: It’s tempting to talk about real estate like it’s always “hot”, but it’s not. Every year the market heats up and cools as you can see in the images below. But on top of a normal seasonal up and down dynamic we’re seeing price growth slow too. In other words, prices just haven’t been rising as fast as they used to. When it comes to multiple offers, we’re seeing fewer these days compared to the past couple years. This is such a good point for sellers to understand. The market isn’t what it used to be. It’s still very competitive if you’re priced right, but it’s not like it was in the heyday of 2013.

3) Sellers, you might just get one offer: It’s easy to think everything is getting multiple offers, but it’s not true. When looking at thousands of current pendings, 59% of homes have only one offer while 20% have two offers. Thus 79% of properties in contract right now have two offers or fewer. My advice? Price realistically for today and you might get a couple offers. But you might only get one. Oh, and if you overprice you likely won’t get any offers at all.

4) It’s more aggressive at lower prices: This won’t come as a shock, but we’re seeing more multiple offers at lower price points. Here’s a look at multiple offers among current pendings as well as recent sales. Keep in mind there aren’t many sales and pendings above $700,000, so I wouldn’t put too much weight on these categories showing a higher percentage.

5) Many layers to the onion: Looking at multiple offers is just one way to see what the market is doing. The truth is there are many layers of the onion when it comes to real estate data, which is why I advise looking to many different metrics to understand the market. In other words, it’s not just about multiple offers to me (but this is cool to see).

QUESTIONS:

How did I get this data? A few years ago our MLS started including fields for “multiple offers” and “number of offers”. I’ve been watching these metrics and reporting on them for the past year or so, but today I’ve taken it to the next level.

Is this data reliable? I’ve had a few people question whether this data is reliable. Of course data is only good as the input by real estate agents and hopefully the truth is being told. Do some people fudge the numbers? Probably. But keep in mind we’re looking at thousands of sales and pendings, so a few outliers won’t sway the trend. Moreover, the bulk of pendings actually show just one offer, which helps support the notion of agent honesty.

I’ve been seeing lots of vibrant tile like this lately. Have you? Do you like it or not? Let me know, and let’s also talk about fake trends and market hype.

Strong opinions: Last week when sharing a picture of this tile on social media, I heard some strong opinions ranging from, “Dude, that is the coolest thing ever” to “Wow, that is just plain ugly.” Some said it was really stylish, but they were concerned it wouldn’t age well. Another person remarked it was like a pattern from the 70s all over again (without the green). Haha.

The reality is vibrant tile has been showing up for the past couple years. Here’s some examples in higher-end flips by Olivia Barrett.

On Twitter @Nashramento shared an image of tile in her Family Room. She said the tile would’ve been too busy for the floor, but not on the wall.

Big point: There’s a variety of opinions on loud tile, but here’s the truth. The market doesn’t care what I think about this tile, and if you’re not a buyer it doesn’t care if you like it either. This doesn’t mean we don’t get to have opinions, but from a real estate sales perspective the ONLY thing that is relevant is whether buyers right now prefer the tile or not.

Moving beyond tile: We have some pretty big headlines right now, and just like the tile above, there are lots of opinions about what the market is doing.

Okay, you either loved the fake trends or you think I’m ridiculous. For me they’re great for conversation – especially in the midst of so many market opinions.

TIPS FOR STAYING GROUNDED IN THIS SLOWING MARKET:

1) Read the article: Some people are only reading headlines instead of the article. Right or wrong, that’s how it is. This becomes a problem if actual stats aren’t as sensational as the headline.

2) Interpret the article: Here’s the question. Is the claim in the headline supported by data? I like hearing opinions, but it doesn’t matter if someone feels like the market is doing something. What do the numbers say? Keep in mind national data could show a different trend than local data too.

3) Listen to many voices: It’s good to get a wide variety of thoughts about the market from more than just one person or data source.

4) Be in touch with what a seasonal slowing looks like: Sorry to beat the dead horse on this point, but we need to be in tune with what normally happens in a slower seasonal market to help us understand trends and spot anything abnormal. My advice? At the beginning of each month ask yourself what is normal. What regularly happens in the given month to prices, sales volume, inventory, days on market, the number of listings, etc…? By the way, here’s my normal vs tanking video if you missed it.

I hope that was interesting or helpful.

Appraiserfest: One last note, I’m going to San Antonio, Texas for Appraiserfest on November 1-3, and I’d love to see you there. I’m very excited to meet people I’ve been talking to online for years, and I’m pumped to get to speak also. My topic is on becoming an expert in your market. I get 90 minutes on stage, but I hope to have lots of time over a few days to sit down to share ideas too.

Questions: What do you think of the tile? Any tips for staying ground in this market in the midst of so much hype? I’d love to hear your take.

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